SunSirs: The BDO Market Was Weak and Deadlocked

Price trend

According to the Commodity Market Analysis System of SunSirs, from September 23rd to 27th, the average price of BDO in China fell from 7,600 RMB/ton to 7,457 RMB/ton, a decrease of 1.88% during the period and a year-on-year decrease of 32.73%. The domestic BDO market was weak and deadlocked, with light spot trading. Recently, the industry's capacity utilization rate has significantly declined, with some support from the supply side. The downstream demand of the terminal generally followed up, with mixed long and short factors and fluctuations in the market's center.

Analysis review

On the supply side, the second phase of Shaanxi Chemical Plant had been shut down, Hengli Phase I had been shut down, and the new production capacity of Phase II had been put into operation at 50% load. The capacity utilization rate of BDO industry had decreased, and the market supply of goods had decreased.. The favorable factors of supply side were gradually weakening.

On the cost side, raw material calcium carbide: The domestic calcium carbide market had seen an upward adjustment, with the price of raw material semi-coke rising. The cost side support was strengthening, and production enterprises were shipping smoothly, but the supply of goods was tight. Raw material methyl alcohol: The methyl alcohol market had stopped falling. As of 10:00 am on September 27th, the domestic price of methyl alcohol in Taicang port was 2,464 RMB/ton. The narrow rise in raw materials such as calcium carbide and methyl alcohol had strengthened the positive impact of BDO cost factors.

On the demand side, the main downstream PTMEG spandex industry chain was operating at a high level, with stable digestion of raw materials. However, spandex had been losing money for a long time, and the bargaining sentiment for entering the market continued. Downstream PBT and PBAT production had increased, but there had been no significant change in the GBL-NMP industry chain and polyurethane industry load. The main focus was on digesting inventory of raw materials or following up on essential contracts. The demand side of BDO had bearish factors for the market.

Market outlook

Multiple sets of devices were under maintenance and load reduction, and the industry's capacity utilization rate had dropped to below 50%. The supply side had certain advantages, and the supplier's market stability mentality was the main focus. The weak performance of terminal demand had led to weak pre holiday stocking intentions in downstream industries. SunSirs’ BDO analyst predicts that the domestic BDO market will mainly experience narrow consolidation.

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